In this case, the Bankruptcy Court held that a Chapter 7 debtor, who was not in default under the obligations of a consumer loan agreement, was not limited to redemption, reaffirmation, or surrender of the collateral.

Here, in the Matter of Windham (Bkrtcy.M.D.Fla., Judge Thomas E. Baynes, Jr.), the court held that a Chapter 7 debtor could keep his vehicle pledged as collateral to the creditor, even though the debt was not reaffirmed, redeemed or surrendered to the creditor.

Instead, the debtor could retain the collateral and continue to pay under the original obligation until the full amount due was paid.

In addition, the court concluded that Chapter 7 debtors may not void any portion of liens on real or personal property, other than by paying the contractual amount of the debt.

Charles R. Harroun, Attorney at Law